Originally published November 9 2003
Some debt counseling non-profits are just looking to make a buck
by Mike Adams, the Health Ranger, NaturalNews Editor
Helping people with bad credit is a booming business. There's a lot of money to be made helping people get out of debt. And where there's profit to be had, con artists are inevitably going to get involved and try to tap into the stream of cash flowing from consumers to companies.
As this story shows, there are good credit counseling companies and there are bad ones. By "bad," they mean there are companies that are primarily in the business of taking your money rather than negotiating with your creditors. They offer lousy service but charge a premium fee for it.
I call it predatory credit counseling: taking money from the very people who can least afford it, with the false promise of helping them get out of debt. If you really want to get out of debt, you first have to get your spending under control. Only then can you turn to credit counseling companies to restructure your debt payments to creditors.
Do your homework to find the honest firms. A good place to start, as mentioned in the article, is www.aiccca.org. Read up on this site, too, and stay informed. And be smart about it. Don't just hand over your money because some firm says they'll restructure your debt. In reality, your debtors may not be willing to negotiate with that firm.
There are very good debt counseling firms out there, of course, so don't think the whole industry is full of crooks. In fact, the industry as a whole offers a much-needed service to American consumers who are buried under a mountain of credit card debt. But make no mistake: until you get your spending under control, debt counseling is just a temporary fix to a deep-rooted problem.
While non-profit status suggests a credit counselor has your best
interest at heart, "That's not always true," says Travis Plunkett,
legislative director for the Consumer Federation of America.
"There are some very good credit-counseling agencies, and some very
bad ones, and non-profit status has nothing to do with it."
You may also want to ask the agency if it belongs to the Association
of Independent Consumer Credit Counseling Agencies, www.aiccca.org, or
the National Foundation for Credit Counseling, www.nfcc.org.
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